Most economists say the U.S. is slowly emerging from the Great Recession, a view that was confirmed to some extent by an exclusive survey of 498 BD+C subscribers whose views we sought on the commercial construction industry’s outlook on business prospects for 2013.
The majority (52.2%) of respondents—architects, engineers, contractors, buildings owners, and others in the commercial, industrial, and institutional field—said their firms were in at least “good” financial health, compared to 49.7% last year.
But a markedly strong showing (86.4%) said their firms would be up in revenues or would at least hold steady in 2013, versus 80.2% last year—an increase that may be not only statistically significant but also most certainly welcome for an industry that could use a bit of cheering.
As was the case last year, more than three-fourths of respondents (75.7%) rated “general economic conditions (i.e., recession)” as the most important concern their firms will face in 2013—roughly comparable to the 78.4% who responded that way last year.
Economy Remains Top Concern for ’13
2013 2012
General economic conditions 75.7% 78.4%
Competition from other firms 44.9% 40.1%
Managing cash flow 37.6% 33.7%
Insufficient capital funding for projects 29.7% 34.5%
Softness in fees/bids 29.7% 28.0%
Government regulations/restrictions 26.6% 23.0%
Price increases (e.g., materials, services)15.7% 18.1%
Avoiding layoffs 16.4% 14.3%
Keeping staff motivated 14.3% 14.3%
Avoiding benefit reductions 11.9% 12.5%
Other factors were largely within the same range as last year, given the margin of error (about 3.5-4%). Competition from other firms (44.9%) went up slightly (from 40.1% in 2011), while having insufficient capital funding for projects declined a bit, to 29.7%, from 34.5% the year before. For both years, nearly three in four (73.4% this year, 74.8% in 2011) described the current business situation for their firms as “very” to “intensely” competitive—further evidence that AEC firms are still struggling for every dollar.
HEALTHCARE, DATA CENTERS LOOK PROMISING FOR ’13
Respondents were asked to rate their firms’ prospects in specific construction sectors on a five-point scale from “excellent” to “very weak.” (Respondents who checked “Not applicable/No opinion/Don’t know” are not counted here.) Among the findings:
- Healthcare continued to be the most highly rated sector, with nearly three-fifths of respondents (58.8%, vs. 54.6% last year) giving it a “good” to “excellent” rating.
- Data centers and mission-critical facilities were also up, with the majority of respondents (52.1%) in the good/excellent category, compared to 45.2% last year
- Senior and assisted-living facilities made a big jump, from last year’s 37.8% of respondents in the good/excellent category, to a majority this year, at 50.5%.
- Government and military work was rated good to excellent by 36.1% of respondents, down slightly from last year’s 41.1%.
- University/college facilities were rated good to excellent by 37.8% of respondents, versus 32.3% in 2011.
- Retail commercial construction got a slight vote of confidence, with nearly one-fifth of respondents (19.9%) stating they thought their firms would have a good to excellent year, nearly double last year’s 11.1%.
- Industrial and warehouse facilities might be staging a comeback: One-fourth (25.5%) of respondents whose firms engaged in that sector said they expect a good to excellent year in 2013; on the other hand, 35.8% said it would be weak or very weak.
Reconstruction—including historic preservation and renovations—accounted for at least 25% of work for more than a third (34.6%) of respondents’ firms, roughly the same as last year (36.3%). Office interiors and fitouts were down, with only 35.7% of this year’s respondents saying this sector would be good to excellent, compared to 42.7% last year.
The prospects for office buildings looked bleak, however, with only 15.6% saying that market would be good to excellent. The majority (55.2%) predicted office buildings would be “weak” or “very weak,” but that’s an improvement from 2011’s 67.3%.
The K-12 sector looked basically flat, with good/excellent responses from 22.9% of respondents this year, compared to 23.2% last year.
As for the use of building information modeling, one-fifth (20.2%) said their firm did not use BIM, about the same as in 2011 (20.6%). Of those who said their firms used BIM, a healthy 26.8% said BIM was used in the majority of projects, based on dollar value—precisely the same as last year. Only a few saw the use of BIM declining in the coming year. Nearly two-fifths (39.0%) of respondents said their companies would be beefing up their investments in technology.
On the communications front, nearly a third of respondents (32.9%) said they did not use social media. Of those who said they did, LinkedIn was the clear choice, at 85.1%, with Facebook in second place (49.5%) and Twitter bringing up the rear (21.1%).
Note: Of the 428 who gave their professional description, 42.1% were architects; 18.7%, engineers; 23.8%, contractors; 5.6% building owners, developers, or facility/property managers; and 9.8%, consultants or “other.” +
Related Stories
| Mar 4, 2013
Korean Air, AC Martin collaborating on Western region's tallest tower
The 1,100-foot Wilshire Grand will combine retail and restaurant space, offices, and a luxury hotel in the sky.
| Mar 4, 2013
Gehry unveils design for Santa Monica hotel-condo tower
If all goes as planned, Frank Gehry will design the first building in his hometown in some 25 years.
| Mar 3, 2013
World's first LEGO museum planned in Denmark
Bjarke Ingels Group and Ralph Appelbaum Associates will team up with the LEGO Group to design the physical home for The LEGO House, the world's first museum dedicated to LEGO.
| Feb 28, 2013
Daniel J. Rectenwald promoted to chief operating officer of HGA
HGA Architects and Engineers (HGA) has promoted Daniel J. Rectenwald, AIA, to Chief Operating Officer. He will oversee daily operation of the firm’s design and business strategies across seven national offices.
| Feb 28, 2013
Videos reveal City 2.0 ideas from 2012 TED Prize winners
Thought leader TED has released eight new videos from winners of its 2012 TED Prize: the City 2.0. The prize went to 10 winners involved in urban issues, including education, safety, health, food, and public space.
| Feb 28, 2013
Greeening Silicon Valley: Samsung's new 1.1 million-sf HQ
Samsung Electronics' new 1.1 million sf San Jose campus will support at least 2,500 sales and R&D staff in the company's semiconductor and display businesses.
| Feb 28, 2013
BIA opens entries for 2013 Brick in Architecture Awards
The Brick Industry Association (BIA) has opened entry submissions for its 2013 Brick In Architecture Awards—with a new Renovation/Restoration category and new category divisions this year. BIA’s annual awards honor architectural excellence and sustainable design nationwide that incorporates clay brick products as the predominant exterior building or paving material.
| Feb 27, 2013
Marvin Windows and Doors now accepting entries for fifth annual Marvin Architect’s Challenge
Architects have an opportunity for their best work to compete on a global stage in the fifth annual Marvin Architect’s Challenge. Previous winners of Marvin Windows and Doors’ prestigious award program have come from Spain, Ireland and across the United States — with their work among the world’s finest.
| Feb 27, 2013
Bronx residents get LEED Platinum public housing complex, rooftop farm
The New York City Housing Authority has opened Arbor House, a 124-unit LEED Platinum complex in the Morrisania neighborhood of the Bronx.
| Feb 25, 2013
HOK sustainability expert Mary Ann Lazarus tapped by AIA for strategy consulting position
Mary Ann Lazarus, FAIA, LEED® AP BD+C, has accepted a two-year consulting position with the American Institute of Architects in Washington, DC. Her new position, which begins March 1, will focus on increasing the AIA's impact on sustainability across the profession. The St. Louis-based architect will continue consulting at HOK.